When Employees Are Compensated Equitably, Everyone Wins

Business Solutions Stamping out pay gaps will improve employee morale and public perception, but to do that, you’ll need a plan to get ahead of the curve.

Scott Cawood

President and CEO, WorldatWork

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Disclosure of gender pay gaps at some of the most high-profile companies in the world has given prominence to a complex issue that has impacted almost every industry. There’s been a rising incidence of discussion and efforts on pay equity from many leading employers.

Pay equity is important but its causes, and therefore its solutions, are still unclear. It’s not as straightforward as it seems. Why? Because it’s not just salary we’re talking about. Pay equity includes total compensation but comprises many factors, including promotions, merit increases, benefits, access to the CEO, representation on the leadership team and more.

Adding fuel to the fire is the rise of social media channels where employees and prospects post about interviews, pay rates and benefits, thereby exposing internal disparities to the outside world.

Make a plan and take action

Each organization has its own formula for fair and equitable compensation. We need to examine HR processes that lead to pay gaps and look for ways to fix them. Here are some steps you can take to identify and eliminate these discrepancies:

Don’t shy away from the issue. Embrace the importance of pay equity and build processes around it rather than waiting for federal or state laws to dictate what you need to do.

Analyze and understand current compensation plans that are in place. If an employee is disadvantaged from the start of employment — perhaps through a biased hiring process — that’s a problem that will continue to grow.

Constantly look at and monitor the process. Review and test it.

Assess gaps from these metrics and make changes accordingly.

Institute transparency between employees, processes and leadership so you’re setting the narrative and telling your own story rather than allowing social sharing to drive and derail it.

An equitable workplace is championed by an organization’s leadership and carried out by its managers, who must advocate for their people. The entire employee lifecycle has to be constantly managed against equity issues.

The benefits of equity

The bottom line is that everyone must be paid fairly and consistently without discrimination on the basis of factors like gender, race, and sexual orientation. People want to know how to succeed within an organization, which starts with understanding how compensation programs are designed and administered.